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NDB money wars exposed

NDB CHIEF EXECUTIVE OFFICERS: Lorato Morapedi

The National Development Bank (NDB) is trading on thin ice as profits are on a downward spiral and recent indications suggest that they will register a loss for the first time. The Development Bank stands at P320 million in arrears, the main factor that has pit management against staff.


WeekendPost is in possession of documents that illustrate disagreements between management and staff concerning the financial standing and future of the bank. Whistle blowers at the bank have revealed that the 2014/15 financial report which is expected to register a loss of the bank for the first time is still kept under the carpet.


“The Bank is anticipating an operational loss due to high impairments and provision thereof, an interest rate constrained environment, leading to reduced liquidity and this scenario is not only peculiar to NDB,” NDB Head of Branding, Marketing and Communications Harry Marks said.


It is understood that while the financials for 2014 are yet to be approved – the bank is anticipating an operational loss.


Documents passed to this publication, confirm the anticipated loss – the financial position of the bank is in a disturbing state and this is exacerbated by the high level of non-performing accounts.


The bank has an unprecedented number of non-performing accounts.  The total NDB portfolio is P1, 769, 398, 215.00 with total arrears at P319, 035 431.00,” states a letter sent to Minister of Finance and Development Planning Kenneth Matambo dated 16 February 2015 which has been passed to this publication.


“The Bank is constantly borrowing from other commercial Banks which it competes with to lend to the general public. These commercial banks lend NDB funds at unfavourable rates and very onerous conditions as they have taken the view that NDB is a high credit risk – especially because of its management inability to curb the bad debt situation that is spiraling out of control,” the letter reads.


It is understood that the commercial banks often require additional surety or guarantee from government because of the shaky ground on which the bank finances are standing. In another letter dated 12 December 2014 from the National Development bank Employees Union (NDBEU) to the board chairperson, the bank employees are concerned about the bank’s debt.


“To date, and as is the case every year, management is struggling to persuade the external auditors to endorse the annual accounts. As usual, management and staff are called upon to cook up some gymnastic explanation with regard to its bad debt provisioning methodology, and generally account for how it has factored the impact of its substantial uncollectable debt. Such a situation cannot be allowed to persist as an annual ritual, year in and year out.”


According to the information, the bank’s financial position has also been negatively impacted by the decision on implementation of several projects (refurbishment, rebranding etc), all done within a relative short time.

The Some employees state that prioritization on project implementation, employees’ state, was not at all well carried out despite very restrained resources. Refurbishments, sources say were done at the tune of 85 million of which P6.5 million was splashed at the rented Palapye branch.


“Naturally therefore certain projects have now been stopped midway. The office refurbishment and rebranding project has been stalled for example, which presents a very embarrassing scenario given that management has been advertising extensively to the general public that they will now be seeing a brand new bank,” NDBEU said through their letter to bank board Chairperson Mr. L. Seitei who has served for more than 10 years in the position.


This publication is informed that the bank is currently faced with challenges in making disbursements at adequate levels because there are insufficient funds for loan disbursements. This, it is believed, has resulted in delayed service delivery and is affecting the credibility of the bank. “Yet there is no formal or open communication to staff with regard to details of the liquidity situation and what they should expect, or what is expected of them.”
 
According to Marks, overall the banking sector has been experiencing a decline in profitability due to the aftershocks of the 2008 world economic meltdown and partly due to a combination of the factors stated. In addition NDB’s development mandate focuses on start-ups and sectors that are susceptible to diseases and drought such as agriculture, he added. NDB’s primary role is to provide Agricultural loans to farmers and/or potential farmers.


Although the bank said to be in financial trouble, the NDB spokesperson explained that the bank has been performing well since 2010; with total assets increasing by 60% from P1 billion to P1.6 billion in 2014 as a result of an increase in net loans and advances.


However he conceded that the bank’s financial performance has been declining: “the bank has also been profitable during this period (since 2010) with profit declining yearly at P57.8million, P48.6million, P40.5 million, and P45.8million in 2010, 2011, 2012 and 2013 respectively.


NDB employees have previously warned the bank management that a downward spiral in performance would ultimately lead the bank to a position that is not favourable for stakeholders. Some stakeholders are already aware that the bank is facing very serious liquidity problems and is currently unable to pay out loan funds – which is the core mandate – even to applicants whose loans have been approved.


“Loan files that are awaiting disbursement of funds are said to have been stacked up and deliberately delayed as an unofficial internal policy so as to manage the financial crisis. Seasonal agricultural loans, especially those of significant amounts, which should have long been disbursed to farmers for the current rain season, are still pending disbursement. All the while customers have been kept in the dark with regard to what is happening with the processing of their loans,” one of the stakeholders said.


The bank is predicting a loss of an estimated P87 million – which is attributed to lack of financial management. The bank is said to be not performing to its optimum best – in the past five years it was making profits of around P48 million.


When contacted for comment NDBEU President, Gilbert Watshipi was reluctant to share information on the alleged financial crises at the bank. He refused to shed light on any information saying it is internal and insisted that bank management and Finance minister Matambo are in talks with staff to address the challenges faced by the bank. “That issue is internal – and besides we are not allowed to speak to the media,” Watshipi pointed out.


Meanwhile Member of Parliament for Mabule/Goodhope, James Mathokgwane is expected to rally parliament to move a motion calling for a commission of inquiry on alleged maladministration, financial mismanagement, corruption and nepotism at NDB in July sitting.

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Travel ban unfair and unjustified – Masisi

7th December 2021
President Dr Mokgweetsi Masisi

For the past two years, the world has been at combat with various COVID-19 variants. A new variant of concern which is considered to have a combination of the greatest hits (Alpha, Beta, Gamma, and Delta) has sent alarm bells around the world.

Botswana’s COVID-19 genomic surveillance, which actively monitors COVID-19 variants in Botswana, picked four samples that were concerning and discovered a completely new variant. In accordance with international obligations, as a responsible member state under the International Health Regulations of 2005, Botswana submitted the suspected new variant for the entire global scientific community to respond to this early finding. Shortly after, the Republic of South Africa, also submitted a similar concerning variant.

The new variant, ‘Omicron’ is named after the 15th letter of the Greek Alphabet to avoid public confusion and stigma.
The news spread like wild fire which resulted in European Union member states, the United Arab Emirates and United States of America imposing travel bans on Botswana and other sister SADC nations, resulting in drawing a wedge between nations.

In his address on the occasion of an update on Government’s response to the COVID-19 pandemic President Dr Mokgweetsi Masisi has shunned the response by some countries to Botswana’s detection of the Omicron variant stating that it is unfortunate as it appears to have caused unnecessary panic amongst the public across the world. He considers it defeating the spirit of multilateral cooperation in dealing with this global pandemic.

“The decision to ban our citizens from travelling to certain countries was hastily made and is not only unfair but is also unjustified while remain confident that reason and logic will prevail, the harshness of the decision has the effect of our shaking our belief in the sincerity of declared friendship and commitment of equality and economic prosperity for us,” he said.

President Masisi has appealed to the nations that have imposed travel restrictions on Botswana to reflect and review their travel restrictions stance against the Southern African region.

African leaders and heads of state are in agreement on a matter. Some stating that the travel bans are ‘uncalled for, afro phobic, unscientific, strict, unfair and unjustified’. They have come out to bash the unilateral travel bans and request immediate upliftment of the restrictions imposed on SADC member states by European Union member states, the United Arab Emirates and United States of America.

While Batswana are banned from international travel, locally as at 26th November 2021, a total of 195 068 COVID19 cases and 2 418 deaths had been reported since the beginning of the pandemic.

“We have been steadily witnessing a decrease in the number of new cases and deaths in the last three months. We are currently reporting an average of less 10 infections per 100 000 people compared to 648 cases per 100 000 people at the peak of the third wave. We have also observed a gradual decline in hospitalizations across the country with an average of less than 10 patients at a time at Sir Ketumile Masire Teaching Hospital (SKMTH) and our other health facilities countrywide,” pointed out President Masisi.

Masisi encouraged Batswana not to despair as to date, all the nations’ key indicators remain stable. “This is comforting although it still does not warrant any complacency on our part in terms of behaviour and other attitudinal patterns towards this dreadful disease. We are actively monitoring the evolving situation in view new variant of concern,’’ he sternly advised.

Government through the different Ministries leading the different sectors, has been working tirelessly to prepare for potential outbreaks and a fourth (4th) wave. This will be achieved through; installing oxygen generating plants and increasing skilled human capacity.

With regards to the vaccination programme; as of 29th November 2021, an estimated One Million and Fifty Three Thousand Three Hundred and Sixty One (1 053 361) people translating to 75.7% of the target Batswana citizens and residents over the age of 18 years have received at least 1 dose of the COVID-19 vaccines. A total of Nine Hundred and Fifty Thousand Nine Hundred and Seventy Three (950 973) people translating to 68.4% have been fully vaccinated. This number exceeds the 64% target Botswana has set to achieve by end of December 2021.

Masisi enthusiastically revealed that; “We are one of the three countries in Africa that have achieved the World Health Organisation target of vaccinating at least 40% of the entire population by December 2021. We are committed to ensure that all is done to reduce the transmission of the virus in the country.

More vaccines are being procured to ensure availability for those who have not yet received any dose. Government is also considering booster doses for those who may be identified as qualifying for them.”

President Masisi urged Batswana to continue observing the COVID-19 health protocols of social distancing, washing hands or sanitizing and wearing masks and avoid unnecessary travelling.

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China pledges a billion vaccines to Africa

7th December 2021

As COVID-19 pandemic continues to shake the world, China has promised to donate a billion coronavirus vaccines, advance billions of dollars for African trade and infrastructure, and write off interest-free loans to African countries to help the continent recover from the coronavirus pandemic. All these promises emerged at the Conference of the Forum on China-Africa Cooperation (FOCAC) held in Senegal at the end of November 2021.

Chinese President Xi Jinping announced that China will provide one billion doses of vaccines to Africa when delivering keynote speech at the Eighth Ministerial FOCAC via video link on 29th November. Of those, 600 million would be via donations and the rest would be produced jointly by African countries and Chinese companies. In addition, China would send medical teams to help the continent deal with the pandemic.

President Xi also announced nine programmes that China will work closely with African countries in the next three years. He mentioned the medical and health program, the poverty reduction and agricultural development program, the trade promotion program, the investment promotion program, the digital innovation program, the green development program, the capacity building program, the cultural and people-to-people exchange program, the peace and security program. President Xi hailed China-Africa relations as a shining example for building a new type of international relations.

Furthermore, Xi said Beijing would pump US$10 billion into African financial institutions for onward lending to small and medium enterprises. He promised to extend another US$10 billion of its International Monetary Fund allocation of special drawing rights, which would help stabilise foreign exchange reserves. In addition, China will write-off interest-free loans due this year, to help the economies that had been ravaged by the pandemic. Last year, China also promised to write off interest-free loans due at the end of 2020.

Beijing pledged US$60 billion to finance Africa’s infrastructure at the forum in Johannesburg in 2015, and a similar amount when the gathering was held in the Chinese capital in 2018. But in the past few years, Chinese lenders, including the policy banks – Exim Bank of China and China Development Bank – have become more cautious and are now demanding bankable feasibility studies amid debt distress in the continent.

Besides seeking more money for projects, Xi said China would encourage more imports of African agricultural products, and increase the range of zero-tariff goods, aiming for US$300 billion of total imports from Africa in the next three years.

China would also advance US$10 billion of trade financing to support African exports into China. He said the country would also advance another US$10 billion to promote agriculture in Africa, send 500 experts and establish China-Africa joint agro-technology centres and demonstration villages. African countries are pushing to grow exports of agricultural products into China. At the moment, Beijing maintains an enormous trade surplus over the continent. African imports from China include machinery, electronics, construction equipment, textiles and footwear.

Meanwhile, State Councilor and Foreign Minister Wang Yi summarized FOCAC achievements when meeting with journalists ahead the 8th FOCAC Ministerial Conference. Wang said that the FOCAC is a crucial platform for collective dialogue between China and Africa and an effective mechanism for practical cooperation.

He said since the inception of the FOCAC 21 years ago, Chinese enterprises have built over 10,000 kilometers of railways, nearly 100,000 kilometers of roads, nearly 1,000 bridges, nearly 100 ports, and over 80 large-scale power facilities in Africa.

In addition, they have assisted Africa in building over 130 medical facilities, 45 gymnasiums and more than 170 schools, and training over 160,000 professionals in various fields. Chinese medical teams have provided medical service to an accumulated number of 230 million, and China’s network service has covered around 700 million user terminals.

Yi said that the Eighth FOCAC Ministerial Conference was a great success. According to Yi, the success of the conference confirmed the strong will of China and Africa to work together to overcome difficulties and seek common development, and showed the huge potential and bright prospects of China-Africa cooperation.

Wang summarized the most important consensus reached at the conference as following: 1) both sides will promote the spirit of China-Africa friendship and cooperation; 2) China and Africa will work together to defeat the pandemic; 3) both sides will work to enrich China-Africa cooperation in the new era; 4) the two sides will work together to practice true multilateralism; 5) China and Africa will jointly build a China-Africa community with a shared future in the new era.

FOCAC, is one of the developments that came as a major shift in the dynamics of the China-Africa relationships came about in the 1980s when China embarked upon its “Opening up and Reform Policy” –a wide-ranging policy that gave birth to the new China. Economic and geo-strategic interests rather than the desire to export a specific political philosophy drive China’s current relationship with Africa.

For Africa though, the key problem is that our economies are weak in value creation. 
As argued by one economist, what workers and factories produce is produced more efficiently, with better quality and at lower cost, by other economies. “In such circumstances, making money is easier through rent than through value creation.

African governments should be capable of guiding their private sector towards value creation, a key factor for achieving a sustainable competitive edge in the global market. Furthermore, partnerships that Africa forges should be targeted to enhance such an environment”. The question remains as to whether China’s intervention in Africa will help address this challenge.

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COVID-19 has pushed cost of living up – report

7th December 2021

A report by The Economist Intelligence Unit (The EIU) has given its outlook for the rise and fall of living costs around the world.

The report is based on current and past trends impacting the cost of living, including currency swings, local inflation and commodity shocks. In addition, it compares more than 400 individual prices across over 200 products and services in 173 cities.

The Worldwide Cost of Living (WCOL) rankings continue to be sensitive to shifts brought about by the COVID-19 pandemic, which have pushed up the cost of living across the world’s major cities. Although most economies are now recovering as covid-19 vaccines are rolled out, the world’s major cities still experience frequent surges in cases, prompting renewed social restrictions. In many cities this has disrupted the supply of goods, leading to shortages and higher prices.

The report highlights that “the inflation rate of the prices tracked in the EIU’s WCOL across cities is the fastest recorded over the past five years. It has accelerated beyond the pre-pandemic rate, rising by 3.5% year on year in local-currency terms in 2021, compared with an increase of just 1.9% in 2020 and 2.8% in 2019.”

However; supply-chain problems, as well as exchange-rate shifts and changing consumer demand, have led to rising prices for commodities and other goods. The most rapid increases in the WCOL index were for transport, with the price of a litre of petrol up by 21% on average.

Tel Aviv, a city on Israel’s Mediterranean coast tops the WCOL rankings for the first time ever, making it the most expensive city in the world to live in. The Israeli city climbed from fifth place last year, pushing Paris down to joint second place with Singapore. Tel Aviv’s rise mainly reflects its soaring currency and price increases for around one-tenth of goods in the city, led by groceries and transport, in local-currency terms. Property prices (not included in the index calculation), have also risen, especially in residential areas.

The cheapest cities are mainly in the Middle East and Africa, or in the poorer parts of Asia. Damascus has easily retained its place as the cheapest city in the world to live in. It was ranked the lowest in seven of the ten pricing categories, and was among the lowest in the remaining three. While prices elsewhere have generally firmed up, in Damascus they have fallen as Syria’s war-torn economy has struggled. Tripoli, which also faces political and economic challenges, is ranked second from the bottom in our rankings, and is particularly cheap for food, clothing and transport.

“Over the coming year, we expect to see the cost of living rise further in many cities. Inflationary expectations are also likely to feed into wage rises, further fuelling price rises. However, as central banks cautiously raise interest rates to stem inflation, price increases should moderate from this year’s level. We forecast that global consumer price inflation will average 4.3% in 2022, down from 5.1% in 2021 but still substantially higher than in recent years. If supply-chain disruptions die down and lockdowns ease as expected, then the situation should improve towards the end of 2022, stabilising the cost of living in most major cities.”

“The survey has been designed to enable human resources and finance managers to calculate cost-of-living allowances and build compensation packages for expatriates and business travellers. It can also be used by consumer-goods firms and other companies to map pricing trends and determine optimum prices for their products across cities. In addition, the data can be used to understand the relative expense of a city to formulate policy guidelines,” highlights the report.

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